Baskin-Robbins re-enters the Philippines as Häagen-Dazs exits

This time, the publicly listed company believe it has found the right partner in IceDream. “Upon entering a new country now, our emphasis is on ensuring that we have the right franchise partner to grow with and that we have the right infrastructure in place to help the franchisee be successful,” John Varghese, regional VP for the Middle East, Southeast Asia and Australia for Dunkin’ Brands told Campaign Asia-Pacific via email.

The company plans to open 50 Baskin-Robbins stores in the country over the next five years. The first few stores will open in the Greater Manila area, followed by other major metropolitan areas.

Varghese added that Baskin-Robbins was earlier forced to shut shop in the Philippines because of inadequate infrastructure. Baskin-Robbins currently operates 400 stores in Southeast Asia including Thailand, Singapore, Vietnam and Malaysia.

The ice cream market in the Philippines is estimated to be worth US$215 million. At present, Unilever’s Selecta brand leads with 42.6 per cent of the market, while Nestle follows with about 26 per cent. Other brands such as Arce of Arcefoods Corp, Fruits in Ice Cream from Food People and General Mills’ Häagen-Dazs made up about 7 per cent of the market in 2012.

According to Varghese, there is significant opportunity for the Baskin-Robbins brand in the Philippines. “We believe we’re positioned well against the competition with our wide range of ice cream flavours, ice cream cakes and frozen treats, all served in a friendly environment and at a great value,” he said.

Varghese did not reveal other details about store development and marketing, but it’s clear he has his task cut out.  

In September 2012, Häagen-Dazs decided to stop distributing its products in the Philippines. According to a Euromonitor report, this is because premium brands find it difficult to compete with cheaper local brands. As such, Häagen-Daaz was unable to lure consumers, and its market share declined from 2.3 per cent in 2007 to 1.4 per cent in 2012.

“The small market niche that premium brands target is not enough to sustain profitability in the Philippines," according to the report. "In addition the numerous local manufacturers are marketing their brands as premium quality, and more consumers are beginning to shift to local brands.”

The Euromonitor report states that premium-isation is likely to continue to drive growth. Consumers will continue to look for higher quality products while ice cream makers increase their efforts to provide healthier options, including yoghurt-based ice creams and low-fat variants.